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The Selection of Talent: Experimental and Structural Evidence from Ethiopia

Author

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  • Girum Abebe
  • A. Stefano Caria
  • Esteban Ortiz-Ospina

Abstract

We study how search frictions in the labor market affect firms' ability to recruit talented workers. In a field experiment in Ethiopia, we show that an employer can attract more talented applicants by offering a small monetary incentive for making a job application. Estimates from a structural model suggest that the intervention is effective because the cost of making a job application is large, and positively correlated with jobseeker ability. We provide evidence that this positive correlation is driven by dynamic selection. In a second experiment, we show that local recruiters underestimate the positive impacts of application incentives.

Suggested Citation

  • Girum Abebe & A. Stefano Caria & Esteban Ortiz-Ospina, 2021. "The Selection of Talent: Experimental and Structural Evidence from Ethiopia," American Economic Review, American Economic Association, vol. 111(6), pages 1757-1806, June.
    • Handle: RePEc:aea:aecrev:v:111:y:2021:i:6:p:1757-1806
    DOI: 10.1257/aer.20190586
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    Cited by:

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    3. Banerjee, Abhijit & Sequeira, Sandra, 2023. "Learning by searching: Spatial mismatches and imperfect information in Southern labor markets," Journal of Development Economics, Elsevier, vol. 164(C).
    4. Chakravorty, Bhaskar & Arulampalam, Wiji & Bhatiya, Apurav Yash & Imbert, Clément & Rathelot, Roland, 2024. "Can information about jobs improve the effectiveness of vocational training? Experimental evidence from India," Journal of Development Economics, Elsevier, vol. 169(C).
    5. Blattman, Christopher & Dercon, Stefan & Franklin, Simon, 2022. "Impacts of industrial and entrepreneurial jobs on youth: 5-year experimental evidence on factory job offers and cash grants in Ethiopia," Journal of Development Economics, Elsevier, vol. 156(C).
    6. Oriana Bandiera & Ahmed Elsayed & Andrea Smurra & Céline Zipfel, 2022. "Young Adults and Labor Markets in Africa," Journal of Economic Perspectives, American Economic Association, vol. 36(1), pages 81-100, Winter.
    7. Girum Abebe & Stefano Caria & Marcel Fafchamps & Paolo Falco & Simon Franklin & Simon Quinn & Forhad Shilpi, 2023. "Matching Frictions and Distorted Beliefs:Evidence from a Job Fair Experiment," Working Papers 958, Queen Mary University of London, School of Economics and Finance.
    8. Martin Chegere & Paolo Falco & Andreas Menzel, 2023. "Social Ties at Work and Effort Choice: Experimental Evidence from Tanzania," CERGE-EI Working Papers wp763, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    9. Jonas Hjort & Golvine de Rochambeau & Vinayak Iyer & Fei Ao, 2020. "Informational Barriers to Market Access: Experimental Evidence from Liberian Firms," NBER Working Papers 27662, National Bureau of Economic Research, Inc.
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    11. Poschke, Markus, 2019. "Wage Employment, Unemployment and Self-Employment across Countries," IZA Discussion Papers 12367, Institute of Labor Economics (IZA).
    12. Fang Li & Danchen Liu & Ping Gao & Haiying Shao & Suyan Shen, 2024. "Analysing how government-provided vocational skills training affects migrant workers’ income: A study based on the Livelihood Capital Theory," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
    13. Chiplunkar, Gaurav & Kelley, Erin & Lane, Gregory, 2024. "Competitive Job Seekers: When Sharing Less Leaves Firms at a Loss," IZA Discussion Papers 16840, Institute of Labor Economics (IZA).
    14. Caria, A. Stefano & Labonne, Julien, 2024. "Village social structure and labor market performance: Evidence from the Philippines," Journal of Economic Behavior & Organization, Elsevier, vol. 219(C), pages 371-380.
    15. Diego A. Martin, 2024. "Women Seeking Jobs with Limited Information: Evidence from Iraq," CID Working Papers 157a, Center for International Development at Harvard University.
    16. Chowdhury, Shyamal & Hasan, Syed & Sharma, Uttam, 2024. "The Role of Trainee Selection in the Effectiveness of Vocational Training: Evidence from a Randomized Controlled Trial in Nepal," IZA Discussion Papers 16705, Institute of Labor Economics (IZA).
    17. repec:spo:wpmain:info:hdl:2441/6jahov5tde8vt9aplqrgg3trl4 is not listed on IDEAS
    18. Laura Boudreau & Julia Cajal-Grossi & Rocco Macchiavello, 2023. "Global Value Chains in Developing Countries: A Relational Perspective from Coffee and Garments," Journal of Economic Perspectives, American Economic Association, vol. 37(3), pages 59-86, Summer.
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    20. Yuehao Bai & Meng Hsuan Hsieh & Jizhou Liu & Max Tabord‐Meehan, 2024. "Revisiting the analysis of matched‐pair and stratified experiments in the presence of attrition," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 39(2), pages 256-268, March.
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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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